Prince Edward Island will see 2 increases to minimum wage in 2023

Prince Edward Island's minimum wage will rise to $15 per hour by the end of next year.

On Tuesday, the P.E.I. government announced two increases to the minimum wage that will be implemented over the next year.The first increase will be by 80 cents on Jan. 1, 2023, taking the rate to $14.50 per hour. The second increase will be 50 cents on Oct. 1 of next year, bringing the wage to $15 per hour.

The president of the Cooper Institute, a P.E.I. non-profit that advocates for social change, said the province is hitting the $15 target a little late.

"We were talking about $15 minimum wage five years ago," Joe Byrne told CBC News.

"This winter we're going to be asking people to choose between eating or heating and this is not a sustainable economic model for anybody. We can't ask those who provide such essential services to continue to work and live in poverty."

Byrne said the wage needs to be closer to $18 an hour.

Chamber says jump is too high

But Robert Godfrey, CEO of the Greater Charlottetown Area Chamber of Commerce, said even $15 is a lot for businesses to absorb.

"The chamber supports modest increases in the minimum wage, I want to make that clear very much so. But we're talking about an 8.6 per cent raise for people making minimum wage now," he said.

When's the last time you got an 8.6 per cent raise? Robert Godfrey

"When's the last time you got an 8.6 per cent raise?"

The minimum wage last rose on April 1 of this year, to $13.70.

Next year's increases will meana jump of 9.4 per cent over the course of 18 months.

The changes were announced the same day P.E.I. markedanother month with the highest inflation rate in the country.

The Island's inflation rate has been the country's highest every month since March 2021, with the annual rate peakingin May at 11.1 per cent.

News of the minimum wage increases followedtheEmployment Standards Board's annual review process.

The board took submissions from Islanders as part of this review, before reaching its recommendations for the amount by which the minimum wage should rise.

Bump for slightly higher earners?

The increase will likely mean workers who make a few dollars over minimum wage will also get a bump to keep pace, Godfrey said.

"If you've got 10 employees that adds up really quick. If you're a major hotel, that's tens of thousands of dollars. This isn't small."

He said he would rather have seen an increase in the basic personal exemption for income tax, or a decrease in the tax rate for low-income earners.

Asking small business to pay for this is like asking workers to pay for this...We have to actually put a tax system in place that begins with fair taxation for the wealthiest. Joe Byrne

Byrne agrees the wage increase will be a burden on small business, and a better solution lies within the tax system. But he would focus on the higher end of the spectrum.

"Asking small business to pay for this is like asking workers to pay for this," said Byrne.

"That's actually the wrong issue. We have to actually put a tax system in place that begins with fair taxation for the wealthiest."

A 16 per cent tax on the country's wealthiest people would provide the funding needed for a basic income guarantee, said Byrne, and would be a move toward an economic system that would work for everybody.